Changing the Status Quo in Wealth Management

12.23.14
Features

Margaret (Mag) Black-Scott is the Founder & CEO of Beverly Hills Wealth Management (BHWM), one of the nation’s fastest growing wealth management platforms. BHWM has leveraged technology to scale to over $475M in assets under management within four short years of its founding in 2010.

Margaret (Mag) Black-Scott is the Founder & CEO of Beverly Hills Wealth Management, which was founded in 2010 and is now one of the nation’s fastest growing wealth management platforms catering to high net worth and ultra-high net worth investors. However, her success as the head of a leading wealth management advisor wasn’t achieved overnight. Mag, driven by a desire to understand markets and passionate about applying that financial and market knowledge to helping individuals accomplish their goals, started as a financial advisor at Morgan Stanley & Co. After consistently being one of the top advisors within the firm, Mag then transitioned into the world of management and rose through the ranks over an impressive 30-year career, operating in her most recent role as Vice Chairman of Global Wealth Management until 2008.

At the end of her time at Morgan Stanley, Mag saw key trends in the industry that led to the founding of BHWM. Mag told GrowthCap, “In the midst of industry consolidation, I saw that the wire houses were becoming larger and larger and that an awful lot of clients suddenly felt they were one of millions; they felt as if they were not important to either the advisor or the firm that was holding their assets. I saw clients and advisors leaving.” The lack of personalized service, also coupled with the lack of transparency of investing strategies before and during the recent financial crisis fueled Mag’s desire to create a better, new type of RIA.

BHWM, says Mag, “Was founded on the principal of making financial advisory 1) simple so clients can understand the process, 2) transparent so clients can quickly and efficiently get a snapshot of their holdings to know where they stand on a real-time basis, and 3) easy to under-stand their objectives and their implications on the financial decisions necessary to accomplish them.” These guiding principals have proven to be highly effective, with BHWM currently man-aging approximately $475 million assets under management in under 4 years’ time. Integral to BHWM’s success has been its focus on utilizing technology solutions to leverage its core wealth management and financial advisory capabilities to enable its advisors to provide their clients with extremely high-touch service in an operationally effective manner.

This is in the midst of a more general trend towards hybrid RIA solutions. One of the better-known examples would be Focus Financial, which has been making headlines for its aggressive acquisition of RIAs and subsequent growth to $70 billion in assets under management since the platform launched in 2006. Focus has also attracted investment from some of the industry’s biggest names such as Summit Partners and Centerbridge Capital. Focus’ external-facing solution allows independent RIAs to build their own platform so that they can leverage technology to better scale all the components of their business including client transition, research, legal compliance, and reporting and custody activities. Wirehouses have also invested in technology with Fidelity’s WealthCentral serving as a key platform for custodial services for hundreds of advisors.

BHWM has set itself apart from the above solutions by tailoring its internal technology to focus on their core mission of providing unparalleled customer experience for advisors’ end clients. Their platform optimizes all touch points that advisors have with individual investors. Scot Gray, BHWM’s CIO elaborates on the platform, “Our technology makes the overall on-boarding process for the client painless and more efficient. If a client doesn’t receive great service in that on-boarding process then they’re just going to have a bad taste in their mouth for the entirety of the relationship. Our internal technologies streamline that process for advisors and allow them to spend more time talking with the clients about their actual financial needs.” BHWM has been able to leverage its domain knowledge and decades of experience to improve the way financial advisors can engage and serve their customers.

Technology is playing an important role in the evolution of the RIA industry, especially as high net worth investors migrate away from wirehouse giants in search of more personalized service. RIAs who can leverage platforms to keep their customers happy while simultaneously not dedicating enormous operational resources will be the most successful in terms of both client acquisition and profitability. Still, the industry will also remain highly people-focused, and those with experienced professionals on their rosters will be in the best position to poach investors from larger advisors. BHWM has established itself as one of the unique RIAs that has this mix of both technological talent and industry experience. It will be interesting to watch the company as it continues to expand its platform.

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